mt2p032 - ECO 2013-02 Spring 2003 Second Midterm 6 March...

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ECO 2013-02 Spring 2003 Second Midterm, 6 March 2003. 1) The quantity of real GDP supplied ________ the amount of ________. A) increases as; labor input decreases B) decreases as; capital input increases C) decreases as; capital and labor input decreases D) is unaffected by; technology 2) If the economy is at the natural rate of unemployment, A) real GDP > potential GDP. B) real GDP < potential GDP. C) real GDP = potential GDP. D) All of the above can occur when the economy is at the natural rate of unemployment. 3) The long-run aggregate supply curve illustrates the A) relationship of prices with the level of GDP when real GDP equals potential GDP. B) relationship of aggregate supply and aggregate demand. C) amount of products producers offer at various prices when money wages and other resource prices do not change. D) surpluses, shortages and equilibrium level of GDP. 4) The long-run aggregate supply curve is ________ because along it, as prices rise, the money wage rate ________. A) vertical; falls B) vertical; rises C) upward sloping; falls D) upward sloping; stays constant 5) The short-run aggregate supply curve is upward sloping because A) firms need to receive higher prices to cover the higher costs of producing increasing levels of output. B) technology is scarce. C) capital is scarce. D) potential GDP is less than real GDP when the price level falls. 6) For movements along the short-run aggregate supply curve, A) the money wage rate is constant. B) the real wage rate changes. C) potential GDP remains constant. D) All of the above are correct.
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7) In the above figure, which movement illustrates the impact of a rising price level and a constant money wage rate? A) C to B) to C) to D) to 8) Aggregate demand increases when A) foreign incomes fall. B) interest rates rise. C) the foreign exchange rate rises. D) None of the above answers is correct. 9) If higher inflation is expected in the future, then the A) curve shifts rightward. B) curve shifts rightward. C) curve shifts rightward. D) None of the above answers are correct. 10) In the short run, the equilibrium level of real GDP A) is necessarily less than potential GDP. B) is necessarily equal to potential GDP. C) is necessarily greater than potential GDP. D) could be less than, equal to, or greater than potential GDP.
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11) Based on the figure above, short-run equilibrium occurs at the price level of A) 120 and real GDP of $4 trillion. B) 130 and real GDP of $8 trillion. C) 140 and real GDP of $12 trillion. D) 130 and real GDP of $12 trillion.
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B) difficulty that people have with certain consumption decisions. C) last minute purchases that everyone makes. D) many consumption choices that people face. 16)
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This note was uploaded on 05/22/2011 for the course ECO 2013 taught by Professor Denslow during the Spring '05 term at University of Florida.

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mt2p032 - ECO 2013-02 Spring 2003 Second Midterm 6 March...

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